Commenting on his company’s fourth-quarter earnings Wednesday night, Nvidia CEO Jen-Hsun Huang got really excited about tablets. The success of Nvidia’s Tegra line in Android and Windows RT tablets overcame the growing weaknesses of its core PC graphics market, leading Huang to declare that he “believed in tablets wholeheartedly.”
But Huang didn’t have the same enthusiasm for smartphones, reflecting the fact that Nvidia has had trouble penetrating that potentially lucrative market despite the attractiveness of the Tegra line. Why? Nvidia offers the two major silicon components necessary to power any smartphone. It has the quad-core Tegra 3 processor itself — which has made it into a handful of high-end smartphones like the HTC One X – and thanks to its acquisition of Icera in 2011, it has the radio modem necessary to connect the phone to the network.
But what Nvidia doesn’t have is an integrated applications processor and modem, which Huang readily admitted is its key impediment. Here’s an excerpt from Huang’s comments at Nvidia’s earnings call (you can read the full transcript at Seeking Alpha):
“There is no standalone modem business anymore and in many of these new 4G connected device marketplace, an integrated approach is necessary and that’s the reason why we bought Icera and that’s the reason why we’re investing in LTE.
“… with an LTE modem, the Tegra processor and our software capability, we will be able to address a much larger phone opportunity going forward. And so we’ll have some phone success this year, but we’re not expecting to have a whole lot of phone design wins until we engage the market with LTE.”
There are a lot of reasons why phone makers prefer integrated designs. Fewer components mean fewer suppliers and fewer parts to cram into the limited space of a smartphone. Fewer components mean less complexity in design and ultimately a lower cost to manufacture. But one of the biggest reasons 4G smartphone makers have become so keen on integrated chips is because they drain less power than a split-silicon solution. By sharing the same chipset and reducing the overall number of circuits, the design takes much less of a toll on the battery.
That’s a big concern for smartphone makers as the first generation of LTE handsets proved to be battery killers. Last year before Mobile World Congress, Qualcomm SVP of Product Management Raj Talluri predicted that the power-saving benefits of Qualcomm’s then-new integrated Snapdragon S4 processors would give it a tremendous advantage in the LTE smartphone market. So far his prediction has proven true. Qualcomm has dominated the market.